Franchise Tax Board Auditing ‘Head of Household’

Sacramento – The Franchise Tax Board (FTB) announced mailing more than 135,000 audit letters to taxpayers to verify their “Head of Household” (HOH) filing status on their 2010 state tax return.

Taxpayers who do not qualify will have their tax reassessed at either a single or married-filing-separate filing status. Nearly 34,000 taxpayers who used this status last year did not meet its requirements and were issued more than $35 million in tax assessments.

Each year FTB reviews tax returns of taxpayers who claim the HOH filing status because the qualifications are commonly misunderstood. This filing status generally results in lower tax liabilities for unmarried taxpayers who care for a dependent. To qualify, the taxpayer must provide care for more than one-half of the year and pay more than one-half the cost of maintaining their home. The qualifying person must be related to the taxpayer and meet the requirements to be a
qualifying child or relative. More than 2 million California taxpayers use this filing status each year.

FTB advises taxpayers who receive an HOH letter to respond promptly by completing the enclosed questionnaire. Failure to respond could result in a tax assessment and penalty. Questionnaires can be submitted by any of these methods: